Category Archives: Prepaid Card

Recent NACS Article: “Gift Card Spending Surging”

An articlshutterstock_2943045e published today by NACS confirms what we have been hearing all year: Gift card spending has reached an all-time high.1  Now is the perfect time for marketers to introduce the Intevacon Prepaid Card.  Data continue to support consumer’s preference toward this product, both for personal use, as well as for gift-giving.    

The National Retail Federation conducted a survey indicating that 8 in 10 shoppers will purchase a gift card this holiday season, spending an average of $163.16 each2.  The most valuable piece of information for marketers is that 12% of shoppers will purchase gas station cards, up 11% from last year3.  You can find the article here, or review the highlights below.

  • Gift cards top the holiday wish list for the 7th year in a row, with 6 in 10 gift repie-chartcipients saying that they prefer to receive gift cards.3
  • The average amount that will be spent on each gift card is estimated to be $45.16, with individuals 65 and older spending an average of $175.96 and individuals 35-44 spending an average of $171.15.3 
  • Gift card choices will fall into the following categories: Department Store (40.3%), Restaurant (34.2%), Coffee Shop (19%), and Gas Station (12%).3

 

 

1.          “Gift Card Spending Surging.”  NACS. November 2013. Web. November 2013. http://www.nacsonline.com/News/Daily/Pages/ND1114133.aspx

2.         “Gift Cards.” National Retail Federation Retail Insight Center.  November 2013.  Web.  November 2013.  http://research.nrffoundation.com/Default.aspx?pg=9007#.UoT0BHEo6M8

3.         “Gift Card Spending Reaches All-Time High, According to NRF Survey.” National Retail Federation.  November 2013.  Web.  November 2013.  http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1694

*Data from National Retail Federation Survey

Marketing the Prepaid Card

Consumers are choosing prepaid cards as a method of payment in growing numbers. With such a broad market, the Intevacon Prepaid Card offers functionalities that appeal to all of your target consumers. 

Use the Intevacon Prepaid Card to:

  • Grow your customer footprint
  • Increase spending and cash purchases
  • Establish a relationship of loyalty with your customers

Consumer advantages of using the Intevacon Prepaid Card include:

  • Allows the user to pay at the pump instead of pre-paying for fuel with cash.
  • The Prepaid Card can also be used inside at the register.
  • Discounts can be offered by the marketer for cash purchases using the POS roll-back feature.
  • Purchase restrictions are available to specify how the prepaid card can be used.
  • A required PIN number allows for enhanced security.  Recovery of a lost card can be achieved with the provided reference number.
  • Card is reloadable for repeated use.
  • No fees are subjected to Prepaid card users.

Below is a list of target consumers and applications for the Prepaid Card.  This list can help you determine how you want to market to your customer base.7K0A0426

  • Millennials are attracted to the freedom from institutions that is permitted with the prepaid card.
  • Unbanked, debanked, and underbanked individuals are applicable, regardless of credit.
  • Employers reward their employees with Prepaid bonuses and incentives.
  • Businesses provide give-away promotions to customers and prospects.
  • Businesses use the prepaid card as a fleet card alternative.
  • Non-profits give Prepaid cards to individuals in need and can impose restrictions on purchased products.
  • Philanthropists give Prepaid cards to their philanthropy of choice like a women’s shelter or the local church.
  • Regular Consumers will enjoy the benefits of cents per gallon off of their purchase.
  • Regular Consumers use prepaid cards as a budget resource for staying out of debt.
  • Gift Givers give the Prepaid card as a gift for fuel or retail purchases for events like holidays, birthdays, thank yous, graduation.
  • Parents buy prepaid cards for teenage or college age kids.

Do you have a marketing technique that you would like to share?  We’d love to hear from you!

Evaluating the Prepaid Card Market

Intevacon has expanded into the Prepaid Card business, giving marketers more opportunities to capture revenue while meeting the needs of their customers. As noted in the latest blog, the popularity of Prepaid Cards only continues to grow, and the demographic of Prepaid Card users adds a new opportunity for marketers.

While the opportunity of prepaid card services is very large—$309B was loaded onto U.S. closed-loop prepaid cards in 2012—now is the time for marketers to take advantage of the prepaid trend and educate their customers on the value of making purchases with the Intevacon Prepaid Card.1

A recent article titled “Banks Can’t Afford to Miss the Prepaid Opportunity” only highlights the potential revenue associated with Prepaid Cards.1 Banks are viewing the Prepaid Card as an opportunity to generate fees for activities such as card activation, interchange fees, and reloading. The fees imposed by banks have instigated a new segment of consumer—the “debanked”.2  According to an Aite Group report, there is a $1 billion dollar prepaid card opportunity with these “debanked” consumers who are looking for alternative payment methods from traditional banking accounts.2  These “debanked” consumers are looking for alternative payment methods like the Intevacon Prepaid Card.

While prepaid caiStock_000002480172Smallrd users have historically been viewed as the unbanked, underbanked, and now the “debanked”, there is also a large percentage of the millennial generation, 41%, who say they are likely to use a general purpose reloadable card instead of using a bank account.3 Not far behind, 24% of individuals aged 35-49 make the same claim.3  Even better, 70% of atm users buy prepaid cards, and 9 out of 10 atm users who buy prepaid cards would prefer to purchase their prepaid card from a non-financial institution such as a convenience store.4  In addition, a study by Synergistics Research Corp found that 23% of consumers are likely to buy their prepaid cards at a convenience store.3

As the demographic of Prepaid Card users has expanded, so have the purposes for purchasing a prepaid card. Many consumers view the prepaid card as an opportunity to budget, a way to manage money for teenagers, or an alternative to holding a bank account. Businesses can also benefit from the Intevacon Prepaid Card by using the prepaid card as an incentive for engagement. The Intevacon Prepaid Card is also a great alternative for customers who want to carry a fleet card but do not qualify for credit. The popularity of prepaid cards only increases the marketing capacity that can be applied with the Intevacon Prepaid Card.

1. “Banks Can’t Afford to Miss the Prepaid Card Opportunity.” ATM Marketplace. September 2013. Web. September 2013. http://www.atmmarketplace.com/whitepapers/7193/Banks-Can-t-Afford-to-Miss-the-Prepaid-Card-Opportunity?utm_source=NetWorld%20Alliance&utm_medium=email&utm_campaign=EMNAAMC09252013
2. “The Debanked: A US$1 Billion Prepaid Debit Card Opportunity.” Aite. February 2012. Web. September 2013. http://www.aitegroup.com/Reports/ReportDetail.aspx?recordItemID=899
3. “Prepaid Cards—Competition or Bridge to Checking?” Synergistics Research Corporation. April 2013. Web. September 2013. http://www.synergisticsresearch.com/index.php?option=com_content&view=article&id=72&Itemid=127
4. “Better ATM Services Previews New Research on ATM Use and Prepaid Users.” Payments Journal. February 2013. Web. September 2013. http://www.paymentsjournal.com/Page.aspx?id=15322&terms=+%40TaxCategory+%22%5CStrategy+Sessions%5CSelf+Service+and+Convenience%22

Trends to Watch: The Growth of Prepaid Cards

Intevacon recently made its Prepaid Card available to marketers, and we couldn’t be more excited.  The Prepaid Card empowers marketers to offer customers the ability to pay with cash but have the convenience of a payment card.  In addition, the marketer can use the Prepaid Card as a tool to offer discounts as an incentive for using cash as a method of payment.  Of course, every marketer understands the value of cash payments.  With cash payments, especially cash payments loaded onto a card for future purchases, the marketer is able to increase cash flow, eliminate swipe fees, and encourage future purchases.

The Prepaid Card solution seems to only be gaining ground in popularity as an alternative to the credit card.  Read a few recent statistics below:

Prepaid card use is growing nationally and globally:

  • Global prepaid growth is expected to grow at an annual rate of 22% through 2017, reaching $822B.1
  • As of March 1, 2013, the US government started enforcing a law requiring social security and other government benefits be paid electronically either as a direct deposit or onto a prepaid card.2
  •  Corporations have started utilizing prepaid cards as an alternative means for paychecks, meal vouchers, and healthcare reimbursements.  The result is a reduction in fraud, processing costs, and the carbon footprint of using paper.  The total commercial prepaid opportunity is projected to reach $325B  by 2015 globally.1

Your customers are great candidates for the Prepaid Card:

  • 8.2% of US households are unbanked. This represents 1 in 12 households in the nation, or nearly 10 million in total.3
  • 20.1% of US households are underbanked. This represents one in five households, or 24 million households.3
  • 25% of households have used at least one Alternative Financial Service (AFS) product in the last year, and almost one in ten households have used two or more AFS. In the last 30 days, 12 percent of households used an AFS product.3
  • The general population also views Prepaid Cards as smart cash.  Approximately 48% of the global prepaid open loop opportunity lies within the general population of banked consumers looking to segment their spending on top of their existing payment cards.1
  • Millennials are also quickly adopting prepaid cards as a preferred method of payment.  In June 2013, USA Today reported the results of a survey of more than 1,000 people ages 18 to 34 finding that while 92% currently use a bank, 45% say they have also used outside services including prepaid cards, check cashing, pawn shops and payday loans.4
Resources:
  1. “2012 Global Prepaid Sizing Study, Commissioned by Mastercard: A Look at the Potential for Global Prepaid Growth by 2017.”  Advancing Insights, Advancing Commerce. July 2012.  Web. Sept 2013. https://www.partnersinprepaid.com/pdf/a-look-at-the-potential-for-global-prepaid-growth-by-2017.pdf?maincategory=TOPICSsubcategory=RESEARCH
  2. “US Treasury Requires Electronic Federal Benefit Payments.”  Go Direct. Web.  Sept 2013.  http://godirect.org/
  3. Burhouse, Susan and Osaki, Yazmin. “2011 FDIC National Survey of Unbanked and Underbanked Households, Executive Summary.”  FDIC. Sept 2012. Web. Sept 2013. http://www.fdic.gov/householdsurvey/
  4. Malcom, Hadley. “Millennials Big Fans of Prepaid Cards, Payday Loans.” USA Today. June 13, 2013.  Web. September 2013.  http://www.usatoday.com/story/money/personalfinance/2013/06/13/millennials-banking-alternatives/2408861/